Directors’ & Officers’ Liability

Corporate standards improving

 

China: The fact that there haven’t been as many shareholder suits in China as in other countries in the region can be attributed to problems in the civil compensation system and court rulings. In China, the burden of proof lies with the plaintiff. Minority shareholders – who are often involved in these types of suits – usually don’t have the resources to collect substantial evidence.

 

In 1998 and 1999, a group of investors in Shanghai sued Chengdu Hongguang Industrial Shareholding Co. due to losses after a decline in Hongguang Industrial’s stock prices. The shareholders accused the company of not disclosing problems with its production line in their prospectus. The compensation claim was rejected by the court on the ground that they had not been able to establish the losses were caused by false statements in the prospectus.

 

In mediation, however, these 11 investors were awarded CNY220,000 (USD28,160), making this the first civil indemnification in a security case. Since January 2002, Chinese courts have dealt with approximately 1,000 civil compensation complaints involving failure to disclose relevant information, but only a small percentage have been satisfactorily settled.

 

Source: Business Times, 2 Novernber 2006

Asian Casualty Report 10th Edition June 2008 – Gen Re

 

Monetary Authority and SGX to Oversee Corporate Governance

Singapore; Oversight of corporate governance of listed companies will be transferred from the Council of Corporate Disclosure and Governance (CCDG) to the Monetary Authority of Singapore (MAS) and the Singapore Exchange Ltd (SGX), effective 1 September 2007

 

The transfer of regulatory oversight is intended to clarify and streamline listed companies’ responsibilities in the field of corporate governance. This approach is consistent with that taken in other sectors, in which the regulator takes responsibility for governance issues.

 

SGX will continue to work with other stakeholders to raise governance standards for listed companies.

 

Source: http:llinfo.syx.comlwebnewscentre.nsfl b9c790dOd5bo5d2548256dcf0049ce28/ 48256838002fO7b1482572ea0044e0a6?OpenDocument

Asian Casualty Report 10th Edition June 2008 – Gen Re

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